In the latest Weekly Wright Report:
Child Support: The Extraordinary Medical Expense Component
Mary and Frank have a child together and are now separating. That child has asthma, which is treated on a regular basis and for which Mary and Frank pay out-of-pocket uninsured expenses of $500 a year. Mary earns $120,000 a year and Frank earns $45,000 a year.
Among other things Mary and Frank must address as part of their separation is the appropriate amount of child support that will be paid by one to the other. To begin, they must determine each of their incomes, which is the most significant factor in calculating child support. Other considerations that are taken into account when calculating child support are the work-related day care expense for the child, the cost of the child’s medical insurance, and the amount of any extraordinary medical expenses incurred on behalf of the child. This last item—extraordinary medical expenses—can be difficult to assess, especially since until recently, the term was poorly defined and created confusion among lawyers and judges alike.
Since Mary and Frank have a combined income of less than $180,000 per year, child support is determined by looking at a table that establishes for various income levels the cost of raising a child, known as the basic child support obligation. The basic child support obligation at a particular income level is a function of the general expenses associated with raising a child, such as housing, transportation, food and clothing, and routine medical expenses.
Non-routine medical expenses are not factored into the basic child support amount. These include such things as counselling, orthodontia care (braces), and medication for a chronic medical condition. Where parents incur extraordinary medical expenses on behalf of a child, those expenses are added to the basic child support amount and are shared by the parents based on each parent’s income as a percentage of the total income of both parents (Mary: 72.7%; Frank: 27.3%). For Mary and Frank, the question is whether the annual $500 uninsured expense for their child’s asthma treatment is deemed to be an extraordinary medical expense.
The term “extraordinary medical expenses” was originally defined in the Maryland Child Support Guideline law to mean uninsured costs for medical treatment in excess of $100 per single incident or condition. That definition led to considerable confusion. Questions arose about what is an “incident” or a “condition” and whether the $100 threshold was for a month, a year, or a lifetime. For Mary and Frank, treatment for asthma is probably the type of condition that was contemplated by the definition of extraordinary medical expense, and the $500 expense is above the $100 threshold. However, Mary and Frank will grapple with the issue of whether the $100 threshold is based on a monthly cost (which for Mary and Frank is $41.67 and would not meet the definition) or an annual cost (in which case the $500 expense incurred by Mary and Frank would be factored into the child support calculation).
Fortunately, a recent change to Maryland’s child support law defined extraordinary medical expenses more clearly and rationally. As of October 1, 2019, the term now means uninsured costs for medical treatment for a minor child in excess of $250 in any calendar year. Now, there is little guesswork involved when determining what qualifies as an extraordinary medical expense so there should be fewer disputes about what to include as extraordinary medical expenses when calculating child support, allowing Mary and Frank to focus their time and energy on co-parenting.
New Year, New Minimum Wage Rates
by Don Walsh
In addition to setting a new rate for finding employees exempt from overtime, the ringing in of the New Yar has also ushered in a slew of new minimum wage rates across the Country. Of general note to most of our clients and friends is the increase in Maryland effective January 1 modifying the rate from $10.10 to $11.00 while the tipped employee minimum wage remains at $3.63. Of note, Montgomery County’s increase in minimum wage will increase on July 1 from $13.00 to $14.00 while the tipped minimum wage will remain at $4.00 for food establishments in that jurisdiction. Washington D.C. will also increase its minimum wage on that day from $14.00 to $15.00, with its minimum wage for tipped employees increasing from $4.45 to $5.00. Not effective October 1, 2020, Delaware increases its minimum wage from $9.25 to $9.75 leaving its tipped minimum wage at $2.23.
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